Application Study of Fuzzy Real Option in BOT Infrastructure Project

The traditional project valuation method is discounted cash flow(DCF) analysis method.The method assumes that the future cash flows are known as the fixed number,so that the method can not evaluate the project value influenced by the cash flows fluctuation.From the angle of real option,the uncertain factors will influence the value of the project.Aiming at two uncertain factors,the investment cost and the annual earning,in the BOT infrastructure project,the paper analyzes the real option characteristics of the BOT project.Considering the BOT project value changing with the time,we establish the fuzzy real option financial evaluation model of the BOT infrastructure project.The option value using the model evaluation reflects: the uncertain factors will increase the option value of the project and the value of this increment contributes to investor to reevaluate the project value of the BOT infrastructure from the option angle.